The Digital Shift: Why Brands Need to Listen to Their Customers
As we exited the grips of the COVID-19 pandemic, many brands were more than ready to return to pre-pandemic levels of in-store purchases. However, this desire for “the way things used to be” potentially overlooks a critical reality — and that is that the pandemic served as a sort of accelerator of a trend that existed before we ever heard of this COVID-19 thing.
That trend being that consumers increasingly prefer to interact with brands digitally. Not all consumers but a whole lot of consumers.
Instead of embracing this shift in how consumers prefer to buy from brands and investing more in their digital presence, many brands are doubling down on a “return to physical” stores strategy, hoping to lure customers back. i feel that this strategy is not only misguided but also risks alienating a customer base this is clearly voicing their preference for online shopping.
The Digital Transformation: Not Just a Pandemic Phenomenon
Even before COVID-19 changed the way we used to do so many day-to-day things, this digital transformation was well underway. i’ve had a front row seat of the data, showing eCommerce steadily growing, year over year, and consumers at first who were suspicious, perhaps nervous is a better word, of shopping online now more comfortable with the idea.
The has been a slowly growing trend that i have personally observed since the early 2000s. The pandemic actrf as a sort of catalyst, pushing more quickly this digital adoption at a much faster pace that we had previously observed. According to McKinsey, 75% of consumers tried new shopping behaviors during the pandemic, many of which were driven by digital platforms. This shouldn’t come as a surprise as, especially during the early days of the pandemic, digital shopping was one of our only options.
While many business executives way want to believe that we are going to go back to the way thing used to be, the reality is that this trend was already happening, we weren’t going back, pandemic or no pandemic. This shift is not a temporary anomaly, it’s a fundamental change in consumer behavior.
The Risk of a Dominant Brick-and-Mortar Business Strategy
Despite a clear trend in the shown in commerce data and what i believe is clear indicators shown by consumers that they prefer digital interactions, many brands are increasing their investments in physical stores at the cost of investing in their digital stores.
The logic of this investment strategy, seems to be based in the belief that by upgrading the in-store experience, brands can entice customers back. And in part, that may be true, but to do so at the risk of under funding the digital experience, runs the risk of having fewer and fewer customers to entice into stores at all.
Let’s face it, online shopping is so easy and convenient, we can shop anytime, anywhere, without the hassles associated with getting to and buying from a physical store. In 2000, i bought 3 items on Amazon.com. In 2024, if i’m not buying 3 items on Amazon.com a week, then i’m probably on vacation in LA and i’m going into an Amazon Go for quick and easy purchases.
While, the financial implications of maintaining and upgrading physical stores are substantial this doesn’t need to be an either-or discussion but it currently is, in favor of investing in physical locations over investing in better online customer service, more initiative and user friendly websites and mobile apps, and investments in advanced technologies like augmented reality to create more immersive and personalized shopping experiences.
Listening to the Customer Voice
Voice of Customer has been a trendy topic for many years. Brands have talked about how important it is to listen to the customer. Smart business people have built billion dollar companies selling little more than an online survey tool intended to listen to the voice of the customer. Yet there seems to be a continued disconnect between brand strategy and customer preferences.
Consumers are explicitly stating their preferences for online shopping and brands continue to push for in-store purchases. This lack of alignment risks eroding brand loyalty and drive customers towards competitors who better meet their needs.
Back to the COVID-19 pandemic, i think consumers gave brands a pass. “We want to support the brands we are loyal to. We will buy however we can to support them.” but this sentiment seems to no longer be so prevalent as consumers are voting with their online payment methods, telling brands that if they don’t care enjoyable digital shopping experiences, then they will take their online money to one of their competitors who does.
We are in this new economy, an experience economy, where how a customer feels about the buying experience seems to matter more than ever. From a study conducted by Salesforce, 80% of customers believe that the experience a company provides is as important as its products and services.
💡SIDE NOTE: If you work in brand, marketing, commerce, or analtyics, then you should not only ready Salesforce’s State of the Connected Customer: 4th Edition paper, you should prioritize some meaningful time to study it in details. It’s powerful.
Embracing a Digital-First Future
Consumer buying behavior and habits have changed, and these changes are going to be here for the longterm. The clear path forward, in my opinion, is that brands need to embrace the changes of a digital-first future. This is more than a website or an app, it requires strategic investment in digital capabilities, shifts in how we think about engaging with customers, and reprioritization of budgets.
Here are a few things that we can be thinking about:
Enhance Online Shopping Experiences: Website functionality and design needs to shift from being viewed through the lens of “we have to have a website” to one of “our website is the primary channel in which we will engage with our customers.” Better design, more positive online experiences, more efficient navigation, and i can not stress this enough - A SEAMLESS, EASY TO USE, CHECKOUT PROCESS.
Leverage Analytics: “But….but…jason, you are the CEO of a company that exclusively advises brands on the use of analytics, of course this is your recommendation!!!” That is entirely true but that shouldn’t stop brands from leveraging data to better understand customer preferences in order to create better, more personalized shopping experiences.
Don’t Fear Exploring New Technologies: While i am no fan of chasing the shiny object in the sand, i am a huge fan of keeping up with emerging technologies, playing with them in a sandbox, in order to make more informed decisions about what technologies are best for enhancing customer experiences.
Finally, DO OMNICHANNEL, Rather Than Talking About Omnichannel: While i am recommending, for most brands, a digital-first approach, notice that i didn’t say a digital-only approach. Customers want highly positive and enjoyable experiences with brands, this isn’t about a good digital experience, or a good shipping experience, or a good in-store experience, it’s about an amazing, cohesive customer experience across all touchpoints.
The consumer landscape has been slowly moving towards digital since the early 2000s and the recent COVID-19 pandemic accelerated that change in undeniably ways. Brands that continue to prioritize in-store investments, at the cost of investing more heavily in digital-first experiences as part of an overall cohesive customer experience, are doing so at the risk of alienating a consumer base that has clearly moved online as a primary way of engaging with brands.
